Dairy units in India turn to cheaper alternatives; strike a blow to small farmers.
THE INDIAN milk sector, which surpassed the European Union to become the world’s biggest producer in 2017-18, is growing like never before. A recent report by global analytical company CRISIL forecasts a steady growth in milk sales in coming years and a 50 per cent faster growth in the value-added dairy products sector. Sniffing windfall gains, national and international players are entering Indian dairy sector, widening procurement networks and expanding dairy portfolio. These developments should usher in good news for the country’s 73 million small and marginal dairy farmers who have been struggling to recover the production cost for the past three years. But N Adinarayan, a marginal dairy farmer from Mandambarpalli village in Andhra Pradesh’s Chittoor district, does not think so. And he has a reason.
“Earlier, procurement units used to refuse to pay us a fair price citing surplus supply and a slump in global milk price. They now say the market is flooded with cheaper milk,” informs Adinarayan. But the fact is dairies supplying cheaper alternatives actually sell soya milk mixed with dairy. In last three years, milk procurement rate in Chittoor has remained 18-20 per litre, whereas the production cost has increased to 24-28. These dairies are selling their formulation at as low as 15 and keeping the rate further depressed, he adds.
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